Finding and selecting a company to outsource aspects of your business to needs to be done carefully. Outsource to the wrong business and you risk substandard work if you’re lucky, or worse, you lose a customer, time, or lose money having to get the work re-done.
Despite the risks, there are many reasons you should consider outsourcing. Outsourcing allows you to reduce costs, access skills outside of your organization, increase service offerings, and make better use of internal resources.
For successful outsourcing, here are the top 8 things you’ll want to consider when selecting a service provider:
1. Timing & Intellectual Capital
Outsourcing is a tempting proposition for small businesses who are already stretching the hours of the day to accommodate the existing workload. But before jumping the gun and delegating that work to a 3rd party, you need to consider whether the skills and knowledge that go along with that work could be better used internally.
Another reason you should consider waiting before outsourcing is to first gain some experience performing those functions internally. Getting experience doing a job or performing a task makes it much easier to understand and manage that work when it’s being outsourced to someone else. You also have much clearer expectations of your service provider and can create better contracts that protect everyone’s interests.
2. Trust & Reputation
A lot of work goes into establishing a reputation of trust and dependability. Businesses that do, take their work very seriously and have high expectations of themselves or their teams. It goes without saying then, that these are businesses you’ll want to reach out to first and work your way down the list from there.
Not every business has been around for years, and that doesn’t mean they can’t produce amazing work. For businesses that don’t have an established reputation, getting a recommendation from another business that has actually worked with them in the same capacity is ideal.
3. Core Values & Business Direction
Remember that businesses all have core values that determine their decision-making and priorities. Consider what their core values could mean for your business when working closely together with them.
Be mindful of business’ that are currently delivering a specific service, but the business direction is heading towards pivoting to another service. Even if their track record is great, they may be reducing resources for the service you need in order to power the other.
4. Management & Communication
Even though you might be considering outsourcing in order to save time, you need to remember that you will still need to manage the work at a high-level. Depending on the work being outsourced, and the company you outsource that work to, you may need to do more management than you anticipated.
Establish communication methods, channels, and protocols early on. When your prospecting for service providers, pay close attention to their response rates, quality of responses, attention to detail, and overall availability. Any hiccups in these areas could spell problems down the road and should not be dismissed lightly.
5. Contracts & Expectations
Make sure that you have a contract in place that spells out what the expectations are of each party. Like any business relationship, these expectations need to be clearly established before entering into any business partnership.
You should also consider creating a scope of work that clearly states what you need the other company to deliver. Include timelines if any work is time-sensitive.
6. Time Zones & Collaboration
Collaborating with a team that is in the same time zone is much easier, and allows everyone to work on a similar schedule. That doesn’t mean that you shouldn’t outsource to a business that is in a different time-zone – as long as you can work out a schedule that works for everyone.
You’ll also want to leverage collaboration tools like Trello, Asana, or Slack to have a centralized place for all communications, files, and projects. Other tools like video conferencing software can also come in handy by allowing you to hold virtual “face-to-face” meetings and get aligned on current goals and needs.
7. Interview Multiple Service Providers
This is Purchasing 101 – never make a decision based on a quote or estimate from a single service provider. Despite their reputation, reliability, communication, availability, and track record, you need to have your options open.
Get at least 3 quotes if possible, and make sure to interview each service provider to determine who will be the best fit. After all, you don’t always want to go with the cheapest or most “obvious” option. Do your research and due diligence.
8. Costs & Business Plan
If the primary objective in outsourcing is to reduce costs, then that can be easily achieved by reviewing proposals from service providers and comparing those costs against in-house costs for the same work. If, however, your primary objective is to offer more services, or better services, then you’ll need to factor additional costs into your business plan.
Your business plan should include the cost of outsourcing when establishing your price-point, ideal customer avatar, and value proposition. You’ll want to create a clear plan that includes all outsourced activities and deliverables.
Outsourcing can be extremely beneficial for businesses of all sizes. For small businesses, successful outsourcing could see them experience the growth needed to hire in-house staff. For larger companies, successful outsourcing allows them stay focused on their core services and business operations that have established them in their market.
With a global talent pool within reach, there is no shortage of outsourcing options to choose from. And with online networking through social media channels like LinkedIn or Facebook Groups, you can connect and engage with professionals like never before.
Share Your Experience
Have you had a really positive, or negative, experience outsourcing work? What advice would you offer others to help them avoid pitfalls, or to successfully grow their business through outsourcing?
Let’s hear your thoughts in the comments below…